Monessen revival boils down to money that could be difficult to secure

Jim Ference | The Valley Independent - The Eisenberg Building, a former department store on Schoonmaker Avenue in Monessen, was purchased for $1,000 by George Christo of Staten Island. The city has cited the structure for code violations. Tuesday, May,14,2013

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Monessen officials stand little chance of pulling together as much as $8.5 million to match a portion of the $30.5 million in public financing they say would transform the Rust Belt city into an artists' mecca, a state lawmaker said.

Rep. Ted Harhai, D-Monessen, said public funding for the “Monessen Rising” project will require the city to match its share before any state taxpayer money is committed to the project.

The cost of Monessen Rising, which aims to entice artists to move to the former steel town and develop businesses, is outlined in a proposal authored by Urban Design Ventures in Homestead that was introduced at an invitation-only luncheon last year for business owners and a few residents.

Patty Bukowski, a candidate for city council who attended, said she raised the issue of where the city would get matching funds.

“I brought up the $30 million as a question,” she said. “It's impossible to come up with matching funds. Who is going to invest in Monessen at this point? We're not a good risk. Monessen is icing the cake without baking it.”

The city of 7,720, just a third of its population before the steel industry collapse drove out jobs and people, has an operating budget of $4.5 million.

“They're not getting a dime from the state unless they put money up front,” Harhai said. “They have to be prepared to have matching funds before the state will even talk to them. The state is not going to hand out money for just any project.”

But Walter Haglund of Urban Design Ventures, the city's redevelopment authority consultant, contends that grants and matching funds are available.

“We have had numerous meetings with the state, and it is looking very favorable,” he said.

Haglund said the authority plans to transfer the former city hall to a nonprofit that can raise money from private institutions to provide the matching funds to pay for its $2 million conversion to an arts center. The redevelopment authority has several hundred thousand dollars in loans it could use as a match, he said, and the city has designated some state Community Development Block Grant money for the project.

The city has received nearly $5 million in state grants since 2000. But money allocated for projects like Monessen Rising is tight, according to state economic development officials.

Funding questions

The transformation of Monessen from steel town to cultural center is the concept of Staten Island developers George Christo and attorney R. Randy Lee, whose proposal made clear that the project will require local, state and federal funds.

Danielle Thompson, who has a tailoring and screen-printing business on Donner Avenue, said she attended the kick-off luncheon uninvited. Christo “skirted” the issue of matching funds, she said, deflecting her questions by asking, “Anyone like some wine?”

“This project is not even a pipe dream,” Thompson said. “I've seen schemes like this before. He (Christo) wants to use state money to fix up his property. You have people come in here with big pipe dreams. You get to the point you don't believe them anymore.”

Christo formed Monessen Redevelopment LLC last year to oversee the project. He was appointed master developer by the city redevelopment authority to “work closely with the ... authority to rehabilitate existing buildings in Monessen,” the grant proposal states.

Christo estimates it will take $4.5 million in state and federal money to acquire properties, $300,000 from the city's community development funds, $7.1 million from the Pennsylvania Housing Finance Agency and $10 million from state and federal sources for brownfield remediation.

The transformation of city hall into a cultural center “will require a significant financial commitment” from the city, Christo said in the proposal. That includes $250,000 to obtain the building, $1.2 million in state and federal funds for rehabilitation, and $350,000 in historic tax credits.

Westmoreland County commissioners have applied for a $600,000 grant from Marcellus shale relief funds on Monessen's behalf so that the city can purchase properties from the county repository for unpaid taxes, demolish dilapidated structures and repair the rest.

“I would like to do whatever I can to help Monessen turn into a thriving community,” said Commissioner Charles Anderson. “Whatever we can do to make that happen, it's going to be the best thing for Monessen.”

Too grand a plan?

Neither Mayor Mary Jo Smith, who spearheads the project, nor city manager John Harhai, who is Ted Harhai's brother, would comment.

But in an interview with the Valley Independent for a story on her re-election campaign last week, Smith conceded the plan may be too grand.

“Will it all work? Probably not. But some of it is absolutely going to work, and we have to move the city forward one way or another,” Smith said. “We need to celebrate our heritage as a steel town. But we cannot live in the past, and the past kills you. The past is not coming back. We have a plan to move forward, and we're working our plan.”

While Christo's proposal for the city is flush with dollar signs from public sources, he has not invested his money in two dilapidated structures he owns. In an Internet sale in 2008, he paid $16,000 for the Magura Clothing Co. on Schoonmaker Avenue. In 2009, he purchased the nearby Eisenberg Building, a former department store, for $1,000, according to real estate records. The city has cited both structures for code violations, court records show.

Christo said he and other private investors are reluctant to buy into the project without public financing.

“My biggest problem is if I drop $500,000 into the Eisenberg Building, where I do go from there?” he said. “I'm making no money in the near future in Monessen unless the properties I own, or own in the future, attract investors. This plan is not a six-month plan. We're talking years.”

Richard Gazarik and Kate Wilcox are staff writers for Trib Total Media.

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